JPMorgan Crushes Revenue Estimates

JPMorgan reported a record 3Q net income of $5.7 billion, or $1.40 EPS, on revenue of $25.9 billion, according to a release.

In the third quarter of 2011, JPMorgan reported $1.02 EPS.

Wall Street analysts were expecting the bank to post $1.24 EPS on revenue of $24.53 billion.

Shares of JPMorgan were last trading up 1% in the pre-market.

Here’s some commentary from JPMorgan’s CEO Jamie Dimon:

“The Firm reported strong performance across all our businesses in the third quarter of 2012. Revenue for the quarter was $25.9 billion, up 6% compared with the prior year, or 16% before the impact of DVA. These results reflected continued momentum in all our businesses.”

Dimon continued: “The Investment Bank reported favourable Fixed Income Markets results and maintained its #1 ranking for Global Investment Banking fees. Consumer & Business Banking average deposits were up 9% and Business Banking loan balances grew for the eighth consecutive quarter to a record $19 billion, up 8% compared with the prior year. Mortgage Banking originations were $47 billion, up 29% compared with the prior year. Credit Card sales volume was up 11% compared with the prior year. Commercial Banking reported record revenue and grew loan balances for the ninth consecutive quarter to a record $124 billion, up 15% compared with the prior year. Treasury & Securities Services assets under custody rose to a record $18.2 trillion, up 12% compared with the prior year. Asset Management reported positive net long-term product flows for the fourteenth consecutive quarter and record loan balances of $75 billion.”

Dimon commented: “Importantly, we believe the housing market has turned the corner. In our Mortgage Banking business, we were encouraged that credit trends continued to modestly improve,and, as a result, the Firm reduced the related loan loss reserves by $900 million. Despite this improvement, the absolute level of charge-offs remains elevated. We also expect to see high defaultrelated expense for a while longer. We are acting responsibly to help homeowners and prevent foreclosures, offering nearly 1.4 million mortgage modifications and completing 578,000 since 2009. Credit trends in our credit card portfolio continued to improve, and the wholesale credit environment remained stable.”

“The underlying strength in the Firm’s results is reflected in our support for customers, corporate clients and communities around the world. The Firm has provided credit and raised capital of over $1.3 trillion for our commercial and consumer clients during the first nine months of 2012. This included more than $15 billion of credit provided for U.S. small businesses, an increase of 21% compared with the same period last year. This also included $52 billion of capital raised and credit

Dimon added: “The underlying strength in the Firm’s results is reflected in our support for customers, corporate clients and communities around the world. The Firm has provided credit and raised capital of over $1.3 trillion for our commercial and consumer clients during the first nine months of 2012. This included more than $15 billion of credit provided for U.S. small businesses, an increase of 21% compared with the same period last year. This also included $52 billion of capital raised and credit provided for more than 1,300 nonprofit and government entities so far this year, including states, municipalities, hospitals and universities.”

Dimon added: “There were several significant items that affected our results this quarter − some
positively, some negatively. As we always do, we discuss these significant items in detail within our
disclosures.”

Commenting on the balance sheet, Dimon said: “We strengthened our fortress balance sheet, ending
the third quarter with a strong Basel I Tier 1 common ratio of 10.4%, up from 9.9% in the second quarter. We estimate that our Basel III Tier 1 common ratio was approximately 8.4% at the end of the third quarter, up from 7.9% in the second quarter.”

Dimon concluded: “I am proud of the momentum we are seeing throughout our businesses. The exceptional power of our franchise is evident in the solid foundation of our fortress balance sheet and the tremendouscapacity of JPMorgan Chase to support our customers and communities around the world while making significant investments for the future.”